No Option for 18% GST as Outdoor Catering Falls Under Mandatory 5% Entry: AAR Tamilnadu

In re Friends Catering CBE (GST AAR Tamilnadu)

Advance Ruling obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act.

The Tamil Nadu Authority for Advance Ruling (AAR) in In re Friends Catering CBE examined the applicable GST rate and classification for outdoor catering services provided in two distinct business models. The applicant, engaged in outdoor catering without providing hotel accommodation or operating from “specified premises,” supplied (i) composite catering services involving preparation, transport, and on-site serving with manpower, and (ii) supply of food prepared at its premises and delivered to customers without any on-site service or labour involvement. The applicant sought clarity on the applicable GST rate, classification, and whether it could choose between concessional and standard rates depending on input tax credit (ITC) usage.

The AAR analysed the nature of supply under theCentral Goods and Services Tax Act, 2017, particularly Schedule II, which treats supply of food as a service when provided as part of a composite supply. It held that both models qualify as “composite supply” since they involve preparation and supply of food, along with elements such as transportation or service, even if delivery is at the recipient’s risk. Accordingly, both models are classified as supply of services.